Ocwen Financial Corp (NYSE:OCN) reported a preliminary loss of $598.4 million in 4Q2014. The firm, however, expects to return to profitability in 2015. The company has delayed filing its annual report and, therefore, faces a threat of getting delisted at the NYSE.
Ocwen said that the results might change as they are preliminary. The company said that it does not have an estimate of when the financial report for 2014 will be finalized. The non-filing of the report comes in the background of string of challenges for the company.
The company, in December, agreed to pay $150 million and its executive chairman agreed to step down after Ocwen was alleged to have engaged in improper servicing practices. The company has been under the scanner of New York State’s Department of Financial Services for questionable dealings with affiliated companies.
Owen has said that it would sell off its servicing rights for mortgages owned by government-backed entities like Fannie Mae and Freddie Mac. The company further noted that it would focus on “nonagency mortgages”.
In 4Q2014 ending December 31, Ocwen reported a loss of $598.4 million or $4.77 per share. The company had made a profit of $134.3 millionin the year ago period. The 4Q2014 result includes a write-down of $420.2 million and $113.9 million in professional services unit. Total revenue of the company fell by 11.3% to $493.3 million.
Ocwen’s Quarterly loss includes a charge of $420.2 million to write off Ocwen’s goodwill. The charge was not elaborated on by Ocwen. However, a write-off of goodwill happens when a company is no longer expected to do well enough to justify extra value.
The losses also included $186.1 million in legal and settlement expenses over the allegations that the company had engaged in improper service practices for distressed borrowers.
According to Bose George, an analyst with Keefe, Bruyette & Woods, the company will make money however it will face problems from auditors.
